Car-share company car2go has a healthy hold on the Seattle market. It is, after all, the largest U.S. market for the Daimler AG-owned company with 71,000 members.

But almost a year ago, BMW stepped into the market with its ReachNow car-sharing service, marketing its BMW 3-series, electric and Mini cars as a premium option for drivers who needed a car in the city and wanted to drive in a bit more style than the tiny smart cars.

Car2go has offered up an answer to those fancy BMWs and Minis -- the Mercedes-Benz CLA and GLA.

"There are some people who may not want to drive a little smart car, but the bigger thing is...our members want options," said Michael Hoitink, car2go's Seattle manager.

Shares of German carmakers fell on Monday after President-elect Donald Trump warned he would impose a hefty border tax on their vehicles imported into the United States.
In an interview with German newspaper Bild, Trump said: “If you want to build cars in the world, then I wish you all the best. You can build cars for the United States, but for every car that comes to the USA, you will pay 35 percent tax.”
Under pressure to deliver on campaign promises to revive US industrial jobs, Trump has turned his fire on carmakers that use low-cost Mexican plants to serve the US market.
US production
BMW, Daimler and Volkswagen, who have invested heavily in Mexico, responded that they build cars in the US, indeed BMW’s largest factory in the world is in Spartanburg, South Carolina.
Germany’s VDA automotive industry association pointed out that German carmakers have quadrupled light vehicle production in the United States over the past seven years to 850,000 units, more than half of which are exported from there.
“In the long term, the United States would be shooting itself in the foot by imposing tariffs or other trade barriers,” VDA President Matthias Wissmann said in a statement.
German carmakers employ about 33,000 workers in the US and German automotive suppliers about 77,000 more, the VDA said.
Trade war fears
Carsten Brzeski, chief economist at ING Diba bank sees the danger of a major trade war: “If we really take Mr. Trump’s words for granted then we do see the end of free trade. This is the start for a trade war. It’s the start for a period of protectionism. The hope is that in the end his policies will not be as harmful as they sound right now. But if you look at these policies of ‘own country first’, trying to isolate the country from foreign companies, trying to impose tariffs – this will lead to retaliations from other countries, namely that the EU then will also increase border tariffs. And this clearly is the end of free trade.”
In the interview with Bild Trump said: “When you walk down Fifth Avenue, everybody has a Mercedes-Benz parked in front of his house. How many Chevrolets do you see in Germany? Not many, maybe none, you don’t see anything at all over there. It’s a one-way street.”
General Motors, which owns Chevrolet, also owns German based Opel. Its market share in Germany in the early part of 2016 was approximately eight percent.
Trump says BMW selling into US is unfair because Europeans don’t buy Chevrolets. Does he know General Motors owns Opel?— Peter Campbell (@Petercampbell1) January 16, 2017
‘A bad awakening’
In Berlin, the economy minister Sigmar Gabriel responded that rather than trying to penalise German manufacturers, the United States should instead build better and more desirable cars, adding: “The American car industry is getting worse, weaker and more expensive.”
Also in an interview by Bild, Gabriel said: “The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35 percent tariff. I believe it would make the US car industry weaker, worse and above all more expensive. I would wait and see what the Congress has to say about that, which is mostly full of people who want the opposite of Trump.”

Media: MediaOS Video

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As one might imagine, the new cars have all the bells and whistles a proper German luxury car ought to: power everything, heated seats, Bluetooth integration for cell phones, navigation, backup cameras and so forth.

Perhaps more importantly to the serious driver, both the CLA and GLA are vastly more powerful than the smart cars, and with all-wheel-drive on all the GLAs, a bit more room to rove.

The new cars will initially be offered at the same $0.41 per minute rate as the smart cars, with the Mercedez models going up to $0.49 after March 31.

Conveniently enough for car2go, its parent company not only owns the smart brand, but also owns Mercedes-Benz.

Car2go will initially replace 200 of its 750 smart cars in Seattle with 100 each of the CLAs and GLAs, and may ramp up later if demand grows.

Hoitink said the move isn't meant to compete with ReachNow any more than the company already did. Many people have both apps, after all, and just grab whatever is closest when they need a car, he said.

He also said that car2go had been testing B-class Mercedes vehicles in three Canadian cities in 2015 -- before ReachNow launched in North America.